Senate authorizes funding to keep Iran from laundering euro

WASHINGTON (JTA) — The U.S. Senate unanimously authorized funding for programs that would make it easier to shut out Iran from the European Central Bank’s money transfer system.

The amendment to the budget resolution passed early Saturday morning authorizes funding to "to prevent Iran from directly or indirectly accessing the European Central Bank’s Target2 settlement platform and to block Iran’s access to its euro-denominated foreign exchange holdings."

While the overall budget — the first passed by the Senate in four years — squeaked through in a 50-49 vote, the money transfer amendment had the support of the entire body.

The amendment, sponsored by Sens. Mark Kirk (R-Ill.) and Joe Manchin (D-W. Va.), follows a letter in February from a bipartisan slate of 36 senators urging European authorities to authorize such a shutout.

Obama administration officials say they are pressing their European counterparts on the matter.

The senators allege that Iran uses the system to launder euro in its accounts, allowing the Islamic Republic to alleviate tough U.S. and European sanctions aimed at forcing the regime to be more transparent about its nuclear program.

Mark Dubowitz, the executive director of the Foundation for Defense of Democracies, said blocking such transfers would help force Iran’s hand. His group advised the senators who drafted the amendment.

"With Iran just over a year from reaching an undetectable nuclear bomb, Europe is in a position to deny access to the critical foreign exchange reserves that Tehran needs to forestall economic collapse," Dubowitz told JTA. "The bipartisan amendment is another message to the European Central Bank that Congress is united in encouraging the ECB to block Iran’s access to tens of billions of Iranian euros in overseas banks."

The funding authorization does not specify programs or an amount other than to say any such funding must not add to the national deficit — in other words, must be compensated for by other cuts.